Florida’s Energy Policy Illustrates the Downside to Net Neutrality

Numerous regulations have made the widespread adoption of solar power in the Sunshine State a financial impossibility. Could Internet innovation be next?

For most of us reliable high speed Internet access is a daily necessity that when interrupted causes havoc to our routines. We expect our access to be reliable like telephone, water, sewer, and electricity – like a utility. The debate for and against Net Neutrality centers on this question. Should Internet access be regulated like a utility or be open to free market pricing structures that in the immediate future seem poised to rise without regulatory oversight?

In recent years the steady growth of streaming media services like NetFlix, Amazon, and Hulu have had a two-part negative effect on many Internet Service Providers who also provider legacy cable television service. Countless Americans are “cutting the cable” and opting to just pay for Internet access so they can stream services which is resulting in lost cable subscription revenues while simultaneously increasing Internet bandwidth usage.

Cable companies in a search to replace lost revenue are striking deals with large providers like NetFlix to restore and improve performance; and it is this practice of creating Internet “fast lanes” that is causing much of the debate. A key argument for support of Net Neutrality is that all traffic being delivered by ISPs would have to treated equally. Theoretically this would keep costs to consumers fair and service levels high.

The problem in practice however is that none of parties debating regulation today know what to expect from technology tomorrow. A century ago America began regulating power companies as electricity transitioned from a risky experiment to a daily necessity for the population. The regulatory system we have been left with today has made traditional power companies virtual monopolies that use regulation to protect their own interests by stamping out disruptive technologies and thwarting innovation.

Just last week Florida regulators approved a “plan to gut energy efficiency goals [and] end solar power rebates” handing a severe blow to the Sunshine State’s efforts to develop alternative energy. Numerous regulations have made the widespread adoption of solar power in the Sunshine State a financial impossibility even though the state is well suited for solar.

Without regulation cable companies will certainly raise prices for Internet access in the short-term but considering efforts by Google, Facebook and most recently SpaceX to provide widespread wireless Internet access those rate hikes will short lived. Without innovating ISPs would run the risk that eventually the “hard-wired” last mile they profit from is completely eliminated from the business model. However, with regulation disruptive technologies that bring faster wireless Internet access could be blocked by ISPs that would maintain a monopolistic position similar to traditional power companies today.

Undoing yesterday’s energy regulation to allow for today’s solar technology is proving nearly impossible. Net Neutrality and regulation of the Internet as a utility threatens to make the adoption of tomorrow’s wireless Internet similarly difficult.